MMI offers a wide variety of financial services to help improve your financial life. No matter what your financial situation, we can help you to establish an plan of action for achieving your financial goals.

August 25, 2011 Newsletter

According to a study by The Pew Research Center, 75 percent of Americans think college is no longer affordable. Over the past 25 years, tuition costs have increased more than 400 percent; much higher than regular inflation. A student pursuing a bachelor's degree at an in-state four-year school and living on campus will need to budget more than $20,000 a year, according to CollegeBoard.com. And that number is expected to continue to increase.

There is no arguing the cost of a college education – it is an expensive investment. However, a college degree is still a big incentive and should be carefully considered. More than 60 percent of professional jobs in American require a degree. According to the Census Bureau, the average salary for a 25-year-old with a bachelor’s degree is $45,400, compared with $25,900 for a high school graduate. Over an adult’s working life, someone with a B.A. earns an average of $2.1 million, compared with $1.2 million for high school graduates. Those with a master’s degree earned about $55,641, or $2.5 million over a lifetime.

With the cost of education continuing to increase, it’s important for students to understand their options. The following are a few important considerations when preparing to pay for college.

Choose the right school. According to a recent study by Princeton, there is a big misconception that a “good” school will earn a better return on your investment. The study notes that for equally talented students, the choice of college does not award a long-term economic benefit. Ten to 20 years after graduation, the income level for a state university graduate is roughly equal to their Ivy League peers.

Look for scholarships. Scholarships are the best resources because essentially they offer free money. There are several online sources to find great scholarships, such as FastWeb, FinAid, the College Board, and the Financial Aid Resource Center. These websites offer a variety of scholarships based on need, merit, academics, affiliations, and career aspirations.

Finally, consider student loans as a last resort. If you take out a student loan, opt for a subsidized loan. The government pays the interest on these loans until after graduation or the student is no longer in attendance. For more information and resources regarding tuition cost and payment, visit FASFA.ed.gov.

MMI's free eBook "Tips For Change" will show you how. This concise, easy-to-read guide has tips on everything from shopping and eating to saving and credit. Follow the advice and watch great things happen to your money.

The goal of our highly trained professionals is to arm you with the knowledge necessary to take control of your financial situation. Our online seminars stress the development of skills that can assure long-term success. You will gain the peace of mind that comes from improved spending habits, increased savings, and the wise use of credit. Take the first step toward financial wellness by enrolling in a Web seminar today!

While only 10 percent of respondents in a recent Money Management International (MMI) Back to School survey believe students should use credit cards to finance college costs, many students get their first credit card while they are in college. In fact, 84 percent of undergraduates have at least one credit card, according to a 2009 Sallie Mae study of how undergraduate students use credit cards. Since the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act) goes went effect, college students find it much harder to get credit.

The CARD Act establishes new provisions for extending credit to underage consumers:

Consumers under the age of 21 must have a cosigner or an independent means of repaying the debt (such as a job). Before the cardholder reaches age 21, the cosigner is required to approve any increase in the credit limit in writing.

Unsolicited, prescreened credit card offers to consumers under age 21 are banned by the CARD Act.

Credit card companies are no longer allowed to give away promotional items on or near college campuses or at college sponsored events. With permission from universities, credit card companies may still set up tables on campus, but may no longer give away freebies (t-shirts, hats, blankets, etc.) to entice students to sign up for credit cards.

Think before you cosign. Cosigning carries many risks because the primary borrower’s mistakes will end up on both signers’ credit reports. If you want to help your child build credit, first set some ground rules and discuss the responsible use of credit before you sign.

Students should take a lesson in personal finance. Many colleges are now offering classes in personal finance. These classes can be applied in the real world when it comes to making smart decisions about retirement, savings, and credit.

Don't risk missing a payment-sign up for DepositDirect. DepositDirect Authorization allows us to withdraw your deposit from your bank account and save time and money each month. It's secure, convenient and easy! Enroll online today!

Update your account balances online. When you receive your monthly statement from your creditors, login to your MMI accountand update your balances. It is important that we have the most accurate balance information possible on file.

If you would like more information about signing up for a Debt Management Plan through Money Management International, visit MoneyManagement.org.

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About Money Management International

Money Management International (MMI) is a nonprofit, full-service credit counseling agency, providing confidential financial guidance, financial education, counseling, and debt management assistance to consumers since 1958. MMI helps consumers trim their expenses, develop a spending plan, and repay debts. Counseling is available by appointment in branch offices and 24 hours a day, 7 days a week by telephone and Internet. Services are available in English or Spanish. To learn more, call 866.530.9869 or visit MoneyManagement.org.